Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Inheritance taxes and the perpetuation of the aristocracy

Kadin2048 (468275) writes | more than 7 years ago

User Journal 4

In a comment earlier today, I responded to a comment regarding inheritance taxes. As I find the topic interesting, I decided to expand on it. Consider this a work-in-progress.

Inheritance taxes are frequently put forward as a sort of anti-aristocratic tool; a way to somehow prevent families from passing large sums of money -- and consequently, power -- down from one generation to another and perpetuating themselves without any real 'work.'

In a comment earlier today, I responded to a comment regarding inheritance taxes. As I find the topic interesting, I decided to expand on it. Consider this a work-in-progress.

Inheritance taxes are frequently put forward as a sort of anti-aristocratic tool; a way to somehow prevent families from passing large sums of money -- and consequently, power -- down from one generation to another and perpetuating themselves without any real 'work.'

I believe this is wrong, in multiple senses. First, it is wrong in the moral sense, since I believe that it is a violation of any reasonable definition of human rights which allow for the free and independent action of individuals to exercise control over their property as they see fit. (I am aware that there are some people who do not believe in such rights, but frankly I'm not interested in arguing with them -- I'm also aware that there are people who believe that the Earth is flat, or that God created the world 5,000 years ago in about a week; there's a certain point where I'm willing to just write people off as wrong and save my breath. Suffice it to say that if you don't believe in, or are unwilling to take the concept of physical property as a premise, I have very little else to say to you.)

Leaving aside the moral wrongness of inheritance taxes, I also think that they clearly fail at what's often put forward as their chief purpose: preventing the creation of a capitalist aristocracy. Far from this, they actually perpetuate and protect a very particular kind of non-meritocratic aristocracy: the aristocracy not of money, but of political and social power and connections.

Inheritance taxes punish hardest those people who are highly successful in the financial sense, but unsuccessful in the political or social realms; when they die, they leave their children mostly money, which is then pillaged by the government. In contrast, someone else who took the majority of their financial wealth and skillfully converted it to political power (a basically straightforward transaction, for someone raised in the right environment), could easily pass these connections onto their children, entirely untaxed and unfettered.

Thus, the true aristocracy escapes the inheritance taxes and manage to perpetuate their power, because their biggest assets are not necessarily in their bank accounts or even in their investments, they are in their social networks and contacts; they are in the people that they can get their children in to meet; the schools they can get them into; in some cases, simply their names themselves.

Rather than being hurt by inheritance taxes, the true aristocracy realizes that wealth is more than just money, and doesn't seem too worried by them; you rarely hear the Rockefellers or the Kennedys whining, for instance. And why should they -- in fact, inheritance taxes are the best form of protectionism for the truly powerful, because it provides a barrier to entry, keeping the nouveau riche from ever pushing themselves into the very top echelon. The nature of true power is that it takes time to accrue, and by levying punishing taxes on those who have recently acquired power (and still have it in cash, rather than in the more nebulous social connections of "old money") they can keep them down and the playing field sparse.

In short, inheritance taxes protect and encourage those who play 'by the rules' -- rules written by the very powerful. Buy into the system, take your money and pour it into quasi-philanthropy, skillful investment, and political contributions, and you can create power that will last through generations; try to keep it in the bank, and it'll be decimated before your children can use it.

Sorry! There are no comments related to the filter you selected.

Physical property (1)

Omnifarious (11933) | more than 7 years ago | (#19037407)

While I think physical property is in general an excellent idea, I am not so enamored of the concept as you. In fact, I find your treatment of it as an almost binary idea (either you believe in it or you don't) to be faintly disturbing.

But your insight about inheritance taxes and their effect is quite cogent and deserving of a lot of thought. I'm reminded, for example, that many of the Enron executives can't have their money taken away from them because they used it to build enormous and expensive houses, and in some places (and I think TX is one of those) the law prohibits taking someone's home as a punishment.

"moral wrongness of inheritance taxes" (1)

Captain Splendid (673276) | more than 7 years ago | (#19038359)

lolz

Dead people don't have rights. (1)

ScottForbes (528679) | more than 7 years ago | (#19044627)

I believe that it is a violation of any reasonable definition of human rights which allow for the free and independent action of individuals to exercise control over their property as they see fit.

I'll agree that the living have these rights, but your argument appears to be that the dead have human rights too -- in which case, as a future dead person myself, I don't see why I should be required to terminate my property rights at all. In fact I don't see a need to give up any rights just because my metabolism has ceased to metabolize, and so I plan to leave behind clear instructions on how to cast my proxy ballot in future national elections, how to reach a verdict if I'm called for jury duty, and so on.

...or not. Let's try this on for size instead: The legal and moral rights of an individual, as endowed by their Creator, perish with the individual. For the most part we honor the will of the deceased on questions of inheritance, mainly because it's a convenient and time-honored way of distributing the assets, but that's all it is -- it's not a "right" that the dearly departed are exercising from beyond the grave. And you certainly don't have a "right" to be the recipient of inherited wealth; people get written out of wills all the time.

The rest of your argument appears to be that wealthy misanthropes are being "punished" and "pillaged" by inheritance taxes, while the wealthy socialites who bequeath connections and networks are not. Setting aside the question of whether a tax on money-hoarding pariahs is a bad thing, societally speaking, your argument is that, because we cannot tax intangible assets, we should not tax tangible assets... which boils down to an argument against taxation of any kind.

Re:Dead people don't have rights. (1)

Murasaki Skies (894086) | more than 7 years ago | (#19047431)

I'll agree that the living have these rights, but your argument appears to be that the dead have human rights too -- in which case, as a future dead person myself, I don't see why I should be required to terminate my property rights at all. In fact I don't see a need to give up any rights just because my metabolism has ceased to metabolize, and so I plan to leave behind clear instructions on how to cast my proxy ballot in future national elections, how to reach a verdict if I'm called for jury duty, and so on.

...or not. Let's try this on for size instead: The legal and moral rights of an individual, as endowed by their Creator, perish with the individual. For the most part we honor the will of the deceased on questions of inheritance, mainly because it's a convenient and time-honored way of distributing the assets, but that's all it is -- it's not a "right" that the dearly departed are exercising from beyond the grave. And you certainly don't have a "right" to be the recipient of inherited wealth; people get written out of wills all the time.

I pretty much agree. If gifts are taxed (as I believe they are (at least when they're of an inheritance-type size)), then posthumous gifts should also be taxed. An inheritance is nothing more than a posthumous gift.

The rest of your argument appears to be that wealthy misanthropes are being "punished" and "pillaged" by inheritance taxes, while the wealthy socialites who bequeath connections and networks are not. Setting aside the question of whether a tax on money-hoarding pariahs is a bad thing, societally speaking, your argument is that, because we cannot tax intangible assets, we should not tax tangible assets... which boils down to an argument against taxation of any kind.

However, power being continuously concentrated into what are essentially aristocratic families is a legitimate concern. Instead, perhaps gifts of all types could not be taxed, with only monetary gains through income and investments being subject to taxes (I would prefer only investments myself, but that will never happen...). Attempts to pretend that income or investment gains are actually gifts are a problem for the courts to decide... ;)

Feel free to provide information regarding the taxation of gifts, if you (anyone) so desire.

Check for New Comments
Slashdot Login

Need an Account?

Forgot your password?